An election battle that matters

Posted: September 15, 2020 in Uncategorized

The key political battleground is the Care Act 2. The Care Act 2 is practically the US version of JobKeeper. A stimulus that help people survive the Covid-19 income crash.

The Republican and Democrat are still miles apart upon agreeing in a new stimulus. The Democrats request an extra large stimulus to be combined wth a stopgap measure to stop the US Government shutdown.

The economy fared quite well in this Covid-19 time because due to the Cares Act 1, people could continue spending.

If Cares Act 2 is not introduced consumer spending would fall off a cliff…and consumer spending represents 70% of US GDP. And if Care Act 2 is not done before the US Election, it probably will be done in December and January.

Democrats have a vested interest in making the Care Act unpalatable to Republican. The market would probably crash and there is an interesting statistic.

The behaviour of the stock market in the three months prior to election it is an 80% reliable predictor of the Presidential winner.

A market crash in September/October could spell the doom for President Trump.

President Trump knows it and is calling the Congress for a second round of stimulus cheque by reallocating USD300Bn, but still needs the US Congress approval.

A dirty battle.

Update as 14 September: the Republlican “skinny” stimulus (USD300bn) has been rejected. There are gossips of discussions – Republicans offering USD1.5 trillion and Democrats not available for discussion unless the sums is around USD2.5 trillion.

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